Status under the EU Sustainable Finance Disclosure Regulation (SFDR) – Horizon US Sustainable Equity Fund
A. Summary
The Fund is categorised as one which meets the provisions set out in Article 9 of SFDR as a product which has sustainable investment as its objective.
Fund’s investment objective aims to provide capital growth over the long term by investing in US companies that contribute to the development of a sustainable economy across environmental and social themes such as cleaner energy, water management and sustainable transport. The Fund does not use a reference benchmark to meets its sustainable investment objective.
The Investment Manager uses selection criteria to ensure that the Fund invests only in companies that derive at least 50% of their current or future expected revenues from goods and services within the Investment Manager’s sustainable development themes, as set out below:
| Sustainable Development Themes | |
| Efficiency | Sustainable property & finance |
| Cleaner energy | Safety |
| Water management | Quality of life |
| Environmental services | Knowledge & technology |
| Sustainable transport | Health |
- Carbon - Carbon Intensity Scope 1&2
- Carbon - Carbon Footprint Scope 1&2
- Overall UNGC Compliance Status
- ESG Exclusionary screens - see “G. Methodologies for environmental or social characteristics?” below for details on the exclusions
Details of how the sustainable investments do not cause significant harm to any environmental or social sustainable investment objectives, and the policy to assess good governance practices of the investee companies, are included below.
The JHI ESG Investment Policy, which incorporates JHI’s Sustainability Risk Policy, sets out the firmwide ESG Integration Principles, responsible investment principles and Baseline Exclusions applied to investee companies. These exclusions are based on classifications provided by third-party data ESG data providers. This classification is subject to an investment research override in cases where sufficient evidence exists that the third-party field is not accurate or appropriate.
The Fund makes use of both internal resources and external research and data providers. Internal resources comprise specialist sustainability analysts within the investment team and Janus Henderson’s central ESG research team.
Where coverage gaps are identified, specialist ESG Data vendors or inhouse research may be used to complement the ESG research. This ensures consistent data and methodologies are used given an ESG measure per security type and hence can be compared correctly in the portfolio construction process.
An investment is considered a sustainable investment only if it meets all three of the requirements below:
- based on revenue mapping to the Investment Manager’s themes, it contributes to an environmental or social objective;
- it does not cause significant harm to any environmental or social sustainable investment objective; and
- it follows good governance practices.
The Fund’s investment universe is determined by the application of binding positive screening criteria based on the sustainable investment themes of the Investment Manager noted previously. The Investment Manager uses a proprietary methodology to ensure that companies the Fund invests in derive at least 50% of their current or future expected revenues from goods and services aligned with these sustainability themes and as noted above, has a process in place to determine that its sustainable investments don’t significantly harm other relevant environmental or social objectives.
The Investment Manager aims to maintain a carbon footprint and carbon intensity that is at least 20% below the S&P 500.
In addition, the Investment Manager applies screens to exclude direct investment in corporate issuers based on their involvement in certain activities. Specifically, issuers are excluded if they derive more than 5% of their revenue from production of alcohol, fossil fuel extraction and refining, fossil fuel power generation* non-medical animal testing, armaments, fur, gambling, chemicals of concern, genetic engineering, pornography, intensive farming, tobacco, nuclear power, and meat and dairy production.
The Fund considers Principal Adverse Impacts (PAIs) via exclusionary screens as detailed in Section M below.
The Fund also applies the Firmwide Exclusions Policy (the “Firmwide Exclusions Policy”), which includes controversial weapons, as detailed in the Prospectus.
*The Investment Manager may invest in issuers generating power from natural gas if the issuer’s strategy involves a transition to renewable energy power generation and they have a carbon intensity aligned with the scenario of restricting global warming to two degrees above pre-industrial levels. Where carbon intensity of the issuer cannot be determined, the Investment Manager may invest if no more than 10% of the issuer’s revenue is from power generation from any fossil fuels, including natural gas.